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Political Influence and Trade Uncertainty: Evidence from Sanction Threats and Impositions

Author

Listed:
  • Seung Hoon Lee

    (Gerogia Institute of Technology)

  • Yong Suk Lee

    (Stanford University)

Abstract

This paper examines how uncertainty arising from sanction threats impacts international trade. By separately examining the threat stages of sanctions to the actual imposition of sanctions, we distinguish the impact of political uncertainty on trade from that of actual trade disruption. We find that US sanction threats significantly reduce US bilateral trade with target countries. The effect is larger when the target is a nondemocratic state and when sanctions are politically motivated.

Suggested Citation

  • Seung Hoon Lee & Yong Suk Lee, 2018. "Political Influence and Trade Uncertainty: Evidence from Sanction Threats and Impositions," Economics Bulletin, AccessEcon, vol. 38(1), pages 367-372.
    • Handle: RePEc:ebl:ecbull:eb-18-00047
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    File URL: http://www.accessecon.com/Pubs/EB/2018/Volume38/EB-18-V38-I1-P35.pdf
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    Cited by:

    1. Noor Zahirah Mohd Sidek & Bhuk Kiranantawat & Martusorn Khaengkhan, 2022. "The Impact of Uncertainty on Trade: The Case for a Small Port," Economies, MDPI, vol. 10(8), pages 1-18, August.
    2. Fatemeh Rahimzadeh & Hamed Pirpour & Bahman P. Ebrahimi, 2022. "The impact of economic sanctions on the efficiency of bilateral energy exports: the case of Iran," SN Business & Economics, Springer, vol. 2(9), pages 1-18, September.

    More about this item

    Keywords

    Sanctions; Sanction Threats; Trade; Uncertainty;
    All these keywords.

    JEL classification:

    • F5 - International Economics - - International Relations, National Security, and International Political Economy
    • F1 - International Economics - - Trade

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